category management

category management from Adr International

By: Adr International  06/02/2013
Keywords: Cost Management, cost reduction, Strategic Procurement

A food manufacturer gets full up on savings! Geest plc are the UK’s largest manufacturer of supermarket own brand food products supplying ready meal, salads, desserts, pizzas and garlic bread. Every major retailer in the UK market is a customer and some manufacturing plants are dedicated to sole customers. The purchasing team comprises small central team and locialised BU purchasing managers. Little coordination of spend  or sharing best practice, paid lip service to ‘group’ deals ADR were selected through a competitive process and engaged to design and project manage a ‘breakthrough’ change program across all categories comprising of £350m of spend. The objective was to introduce category management or source planning supported by new tools and techniques that could quickly and effectively be deployed. Key deliverable: tackle a minimum of 25 categories and deliver > £6m of savings in less than 12 months. The key deliverables of project ‘Churchill’ were: -       Detailed ‘Opportunity Analysis’ of purchasing in both central and BU locations involving detailed visits to each site and face-to-face interviews -       Training of all key purchasing personnel in core tools and techniques needed o achieve tactical control of the supply base -       Project management of the overall savings effort to ensure overall performance and reporting met the required objectives -       Hands on category support or leadership by ADR for approx 25% of the categories -       Guidance on extending the delivery through strategic sourcing and challenge of existing processes Secondary goal to raise the competencies of the purchasing community and identify a handful of Category Managers capable of leading  future strategic organisational change Savings delivery was in excess of the initial OA and the required target – approaching £10.5m was achieved in 12 months. Successfully challenged ‘taboos’ such as customer nominated sources and suppliers rebates to customers. Introduced new suppliers and significant changes to the supply allocation in order to gain and achieve tactical control of suppliers. Clear evidence of behaviour change in Category Managers

Keywords: Business Cost Reduction, Cost Management, cost reduction, Cost Reduction Services, expense reduction, expense reduction analysts, Strategic Procurement

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